Square Enix has licenced Epic Games' Unreal Engine 3 for use in next-gen game development. It features a robust toolset for creating rich 3D environments and using multi-processor systems. Some games that have been made with it include Gears of War, Unreal Tournament 2007, and Lost Odyssey.

Taku Murata, general manager of the R&D Division at Square Enix said, "The complexity of next-generation game systems featuring HD graphics and multi-core parallel processing poses a number of technological challenges to our game development. However, we can expedite our game development process significantly while allowing extra time and resources to be spent on game design and mechanics by establishing an effective technology platform."

So far, no specific projects have been confirmed to be using this new engine. Look to RPGamer for more news as it becomes available.